�� Plantation Companies - Expect higher near-term CPO
prices. Reiterate BUY calls for Bumitama and Wilmar;
downgrade Indofood Agri Resources to HOLD.
We expect higher near-term CPO prices on lower FFB yields
caused by dry weather in Feb14; CY15F yield recovery will be at
risk if El Nino develops. Palm oil supply growth is expected to
decelerate further from CY16F, when new maturities dwindle.
The fair values of the plantation counters under our coverage
are raised by 1-77% as we lifted CY14-16F CPO prices (in USD)
by 6-12% to reflect tighter supply expectations. We now
forecast CPO prices of RM2,790/MT, RM2,680/MT and
RM2,820/MT for FY2014F, FY2015 and FY2016F respectively.
For SGX-listed plantation stocks, Indofood Agri Resources is
downgraded to HOLD (TP: S$ 1.17 (Prev S$ 1.00)) as recent
rally has mostly priced in higher CPO price outlook. We
reiterate our BUY calls for Bumitama Agri, TP: S$ 1.25 (Prev
S$1.19) and Wilmar, TP: S$ 4.00 (Prev S$ 3.92). First Resources
remains a HOLD (TP: S$2.51 (Prev S$ 2.22); Golden Agri
Resources NOT RATED, fair value S$ 0.57 (Prev S$ 0.46).
1Q14 operating results for Hutchison Port Holdings Trust in line
with estimates, with volume growth at both ports. Net profit
was boosted by gains on divestment of stake in ACT. There are
signs of improvement in US/ EU trade flows; we look for 3-4%
volume growth at the Trust’s ports in FY14. Steady DPU
guidance for FY14 maintained. HPHT is a proxy to the global
recovery theme; prospective yield of close to 8% for FY14 is
attractive. Maintain BUY and US$0.76 target price.
Vard Holdings reported weaker earnings for 1Q14 on higher
salaries and related costs. 1Q14 results below expectations as
net profit came in at NOK85m compared to our expectations in
excess of NOK100m. Disappointment is still largely driven by
Brazil operations. Revenue slipped 2.7% to NOK 2.7 bn. Longer
term investment thesis remains intact, despite near term
operational challenges. More updates to follow.
Midas has won RMB146m worth of contracts for high-speed
train car body components. This is the third set of contract wins
for high-speed train car body components in six months and
brings value of year-to-date order wins to RMB536.9m. These
contracts are for trains up to a speed of 350km/h and are
slated for delivery in 2014, helping the Group to achieve a
strong rebound in earnings. Maintain BUY with target price
S$0.64.
US Indices Last Close Pts Chg % Chg
Dow Jones �� 16,448.7 87.3 0.5
S&P �� 1,869.4 6.0 0.3
NASDAQ �� 4,074.4 (1.2) (0.0)
Regional Indices
ST Index �� 3,242.7 (24.9) (0.
ST Small Cap �� 545.6 (3.3) (0.6)
Hang Seng �� 22,132.5 (91.0) (0.4)
HSCEI �� 9,770.1 (28.6) (0.3)
HSCCI �� 4,084.1 (44.7) (1.1)
KLCI �� 1,855.7 (5.2) (0.3)
SET �� 1,411.2 3.1 0.2
JCI �� 4,818.8 (78.9) (1.6)
PCOMP �� 6,604.4 (80.
(1.2)
KOSPI �� 1,969.3 (2.4) (0.1)
TWSE �� 8,809.7 35.6 0.4
Nikkei �� 14,288.2 (141.0) (1.0)
STI Index Performance
Singapore
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
100-Day MA
Index
STI
Total Market cap (US$bn) 609
Total Daily Vol (m shrs) 1,890
12m ST Index High 3,454
12m ST Index Low 2,960
Source: Bloomberg Finance L.P.
Stock Picks – Large Cap
Rec’n Price (S$)
28 Apr
Target Price
(S$)
ComfortDelgro Buy 2.11 2.19
Global Logistic Properties Buy 2.75 3.31
Keppel Corp Buy 10.52 12.60
Stock Picks – Small Cap
Rec’n Price (S$)
28 Apr
Target Price
(S$)
Goodpack Buy 2.34 2.60
China Merchants Buy 0.965 1.32
Pacific Radiance Ltd Buy 1.035 1.20
Nam Cheong Buy 0.36 0.46
Centurion Corporation Buy 0.725 0.86
Source: DBS Bank
Singapore
Wired Daily
Page 2
Keppel has signed an engineering services agreement with
Workfox B.V, a subsidiary of the Seafox Group (Seafox), to
embark on an engineering study of a purpose-built
accommodation jackup rig with well intervention and one
of the world’s first with Plug & Abandonment (P&A)
features. This has again demonstrated Keppel’s strong
product innovation and R&D capability.
OKP Holdings has secured a S$19.2m contract from PUB,
the national water agency, to implement drainage
improvement projects at several locations across Singapore.
With the inclusion of this contract, OKP’s gross order book
currently stands at S$388.0m, extending till 2017.
Aspial Corporation has entered into an agreement to
acquire a property located at 54-64 A’Beckett Street,
Melbourne, Australia. The total purchase consideration for
the property is A$26.8m. The property is freehold with an
existing low-rise building with a total land area of
approximately 1,295 sqm.
Growth across Asia should remain steady at around 5.5%
overall this year and the next, according to the International
Monetary Fund (IMF). But it warned that this rosy scenario
could go badly wrong if the tightening in global liquidity
occurs more suddenly and sharply than expected, and if
China's economic slowdown proves more serious than
projected. It expects China's growth to moderate to 7.5%
this year (from 7.7% last year), and then to 7.3% next year.
Singapore's growth is forecast to moderate from last year's
4.1% to 3.6% for this year and the next.
U.S. stocks rebounded from last week’s sell-off on betterthan-
expected pending home sales (actual +3.4% m-o-m,
consensus +1%) amid optimism over merger activity. Pfizer
is still interested in a deal after AstraZeneca spurned its
earlier offer. General Electric Co. shares gained after Chief
Executive Officer Jeffrey Immelt met with France’s President
Francois Hollande over the company’s offer for Alstom SA.
Meanwhile, Bank of America shares fell after saying it will
suspend its planned buybacks and dividend increase
because of an error in its capital planning. Investors are also
watching developments in Ukraine. The Obama
administration imposed sanctions on 7 Russian officials and
17 companies linked to the Russian President Vladimir’s
inner circle involved in banking, energy and infrastructure.
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